MANAGEMANT ACCOUNTING

Group _________ Student name

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1. Which of the following statements are correct?

(i) Strategic information is mainly used by senior management in an organisation.
(ii) Productivity measurements are examples of tactical information.
(iii) Operational information is required frequently by its main users.
A. (i) and (ii) only

B. (i) and (iii) only

C. (ii) and (iii) only

D. (i), (ii) and (iii)

2. Reginald is the manager of production department M in a factory which
has ten other production departments.
He receives monthly information that compares planned and actual expenditure for
department M. After department M, all production goes into other factory
departments to be completed prior to being despatched to customers. Decisions
involving capital expenditure in department M are not taken by Reginald. Which of
the following describes Reginald’s role in department M?
A. cost centre manager
B. An investment centre manager
C. A revenue centre manager
D. A profit centre manager
3. Which of the following statements is NOT correct?
A. Cost accounting can be used for inventory valuation to meet the
requirements of internal reporting only.
B. Management accounting provides appropriate information for decision
making,
planning, control and performance evaluation.
C. Routine information can be used for both short‐term and long‐run decisions
D. Financial accounting information can be used for internal reporting purposes.
4. The following statements relate to financial accounting or to cost and
management
accounting:
(i) Financial accounts are historical records
(ii) Cost accounting is part of financial accounting and establishes costs incurred
by an
organisation.
(iii)Management accounting is used to aid planning, control and decision making
Which of the statements are correct?
A. and (ii) only
B. (i) and (iii) only
C. (ii) and (iii) only
D. (i), (ii) and (iii)
5. Which of the following statements is correct?
A Qualitative data is generally non‐numerical information
B Information can only be extracted from external sources
C Operational information gives details of long‐term plans only
D Quantitative data is always accurate
6. The manager of a profit centre is responsible for which of the following?
(i) Revenues of the centre
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(ii) Costs of the centre
(iii) Assets employed in the centre
A (i) only
B (ii) only
C (i) and (ii) only
D (i), (ii) and (iii)
7. Which of the following would be best described as a short‐term tactical
plan?
A. Reviewing cost variances and investigate as appropriate
B. Comparing actual market share to budget
C. Lowering the selling price by 15%
D. Monitoring actual sales to budget
8. Which of the following relates to management accounts and which to
financial accounts?
Management
Financial accounts
accounts
Prepared yearly
For internal use
Contains future informatio
9. The following statements refer to strategic planning:
(i) It is concerned with quantifiable and qualitative matters.
(ii) It is mainly undertaken by middle management in an organisation.
(iii) It is concerned predominantly with the long term.
Which of the statements are correct?
A. and (ii) only
B. (i) and (iii) only
C. (ii) and (iii) only
D. (i), (ii) and (iii)
10. Indicate whether each of the following are ways that the management
accountant helps the management of an organisation.
YES NO
Control
Plan
Co‐ordinate
Make decisions
Motivate
11. A paint manufacturer has a number of departments. Each department is
located in a separate building on the same factory site. In the mixing department
the basic raw materials are mixed together in very large vessels. These are then
moved on to the colour adding department where paints of different colours are
created in these vessels. In the next department – the pouring department – the
paint is poured from these vessels into litre sized tins. The tins then go on to the
labelling department prior to going on to the finished goods department.
The following statements relate to the paint manufacturer:
(i) The mixing department is a cost centre
(ii) A suitable cost unit for the colour adding department is a litre tin of paint
(iii) The pouring department is a profit centre
Which statement or statements is/are correct?
A (i) only
B (i) and (ii) only
C (i) and (iii) only
D (ii) and (iii) only
12. The following statements refer to qualities of good information:
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(i) It should be communicated to the right person.
(ii) It should always be completely accurate before it is used.
(iii) It should be understandable by the recipient.
Which of the above statements are correct?
A (i) and (ii) only
B (i) and (iii) only
C (ii) and (iii) only
D (i), (ii) and (iii)
13. Which of the following describes secondary data?
A data that does not provide any information
B data collected for another purpose
C data collected specifically for the purpose of the survey being undertaken
D data collected by post or telephone, not by personal interview
14. Which of the following are primary sources of data and which are
secondary sources of data?

15. When gathering information you would use both internal sources of
information and external sources of information.
Which of the following are examples of external information?
(i) Trade references.
(ii) Sales representatives’ knowledge.
(iii) A credit agency report
(iv) Bank references
Options:
A (ii) only
B (ii), (iii) and (iv) only
C All of the above
D (i), (iii) and (iv) only
16. When gathering information on a potential client you can use both
internal sources of information and external sources of information.
Which TWO of the following would be classified as internally generated information?
A Supplier references
B Credit reference agency reports
C Sales information
D Ratio calculations
17. Which of the following descriptions only contains essential features of
useful management information?
A Accurate, understandable, presented in report format
B Timely, reliable, supported by calculations
C Regular, complete, communicated in writing
D Understandable, accurate, relevant for its purpose
18. Which of the following describes ‘Information’?
A data that consists of facts and statistics before they have been processed
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B data that consists of numbers, letters, symbols, events and transactions which
have been recorded but not yet processed into a form that is suitable for making
decisions
C facts that have been summarised but not yet processed into a form that is
suitable for making decisions
D data that has been processed in such a way that it has a meaning to the person
who receives it, who may then use it to improve the quality of decision making
18. Which one of the following statements is correct?
A Data is held on computer in digital form whereas information is in a form that is
readable to human beings
B Information is obtained by processing data
C Data and information mean the same thing
D Data consists of numerical or statistical items of information
19. Which of the following is an example of external information that could
be used in a
management accounting system?
A Consumer price index statistics
B Price list for the products sold by the business
C Production volume achieved by the production department
D Discounts given to customers

20. Fill the table below